Good legal governance leads to credibility. Helps us to maximise value and avoid costly disputes.
£130,000 to get to court
£600,000 to take a case through the IP court!
Good examples of Patents that have succeeded: Ermil who developed the can pull and then sold it to coca cola.Before long he was making a lot of money with his few cents take per can!
Is your idea actually YOURS? If it is can you obtain freedome to operate and therefore commercialise the idea. In order to do thsi it will need to be protected.
Learning from Lord of the Rings. Keep it secret. Keep it safe. Or more correctly keep it confidential, keep it safe.
As soon as you start to disclose the core of your stuff you need a NDA in place. As good practice you should still be trying to minimise the information you are giving (the secret sauce as it were). When you come to contracting make sure that there are things in place to stop people getting the full picture (drip feed the information).
Consider if it is needed, can you afford it, can you afford to defend it, is it patentable.
If you do need one write it yourself because someone else won’t know your idea as well as you!
To Incorporate or not?
Sole trader, partnership or PLC? What to choose. There are advantages and disadvantages to each. If you do incorporate you have protection but you have to decide:
- How you divide up the shares in the company.
- Creator, founder, entrepreneur, manager, funder. Look at the contributions now and future contributions and then decide how to divide up the stakes. You are looking to make up an equity split.
- Documents, articles, officers, directors etc. Lots of things to think about.
- What is the rule book – governance of the corporate structure.
- Shareholders agreements whill cover all of this. What are the rules. Who are the directors and who are the shareholders. governance, IP, how to transfer shares, dispute resolution, restrictions and leaver provisions are all in here.There needs to be a structure to protect the shares.
Its about building a contractual mechanism to resolve these disputes in order to avoid a court case later on.
Must have contracts but can have policies which fit everyone.
Your employess represent an operational risk. HR can be tough!
Confidentialitiy, IP ownership, Restrictions and Policies, One size fits all.
National contracts do not talk about IP however, local policies might say that individuals do not own IP if they are working in the context of their trust.
Tony suggested potentially writing to the employer explaining that you are building something in your own time and that it is your own IP but also being willing to work with the NHS to make things better for patients.
Roger explained that it is a negotiation.
The whole room is massively engaged at this point
As a businessperson you should also sign up to an LPA just in case something happens to one of the founders. Make wills which tie in your shares, Assignment of intellectual property and other agreements.
Business Model and Contracts
SAP (standard operating procedures) and quality control – document this so you can demonstrate ‘due process’. Also trading contracts whether they be NDA’s, standard terms, bespoke contracts. Don’t sign it if you don’t understand it. and contracts
Bespoke contracts. key terms, compliance, reflect – make sure it fits with your business model and insurance cover. Negotiate.
Joint ventures are particularly important to get right. Define contributions, milestones, outputs. Licences – Get the scope and the outputs correct.
A contract should be a ‘living document’- it needs to keep up to date with the business!
Venture capitlists – are they scary? The key is to find the right VC. If they don’t fit don’t work with them.
The room is fully engaged. Well done Roger!